The Value Of Appraisal Modernization


As 94% of surveyed lenders agree that appraisal modernization efforts are valuable, two leaders who have witnessed the industry changing say new technology is making things possible that could have only been imagined in the past.

Dean Kelker, Senior Vice President and Chief Risk Officer at SingleSource Property Solutions, and Todd Rasmussen, President of Equity Valuation Partners, recently sat down for interviews with The Mortgage Note, and this is what they had to say.

“The lending process itself has changed quite a bit. It is certainly much faster than it was years ago largely because of the technology that’s been driving it,” Kelker said. “Most recently, largely due to the low interest rates, we have had a large volume of refinance activity in the industry the last few years. The appraisal process has changed, as well as many of the other elements of the lending process.”

Kelker cited digital imaging and electronic reports as helping to move the process along faster for homebuyers. Still, with home prices soaring in some parts of the country, it’s a hard job to be an appraiser, especially in certain places such as the Northeast and Southeast.

“Oftentimes, the price increases begin to happen before the data really catches up,” Kelker said. “In some of the hottest markets, a lot of the contracts basically say the buyer is going to be responsible for any shortage that appears on the appraisal.”

Rasmussen said desktop appraisals are widely accepted because during the height of the COVID-19 pandemic they provided an opportunity to limit face-to-face contact during the home appraisal process.

According to, a desktop appraisal is a property valuation that is completed at the appraiser’s desk, using tax records and information listed on the multiple listing service, or MLS. The appraisers never go to the property.

“To be called desktop, they can’t go to the property,” Rasmussen said.

Rasmussen said no matter how the appraisal is done, people sometimes feel as the person conducting the work is cold and quiet. There is a reason for that, he explained.

“An appraiser’s job is to figure out the value of the home,” Rasmussen said. “The appraiser is impartial. They are independent of the process.”

On June 20, it was announced that Equity Valuation Partners had launched Inhabet. It is a one-stop platform that empowers lenders to generate their own compliant estimate of value for residential and commercial real estate properties.

EVP Founder, CEO, and Principal Drew Watson said in a statement that with the unveiling of the Inhabet platform, they have made it possible for a lender’s trained staff to complete an estimate of value themselves.

“When appraisal management companies first emerged after the financial crisis, I saw an opportunity to transform appraisals for appraisers, banks, credit unions and portfolio lenders with a product that did not require an appraiser’s inspection,” Watson said.

To better understand lenders’ views on appraisal modernization, including benefits, implementation challenges, and possible applications, Fannie Mae’s Economic & Strategic Research Group surveyed senior mortgage executives in February 2022 using its quarterly Mortgage Lender Sentiment Survey.

Among others, the study revealed the following key findings:

  • 94% of the surveyed lenders agreed that appraisal modernization efforts are valuable to the industry.
  • Similarly, nearly all lenders agreed that current tools, such as Collateral Underwriter, are helpful in managing collateral risk (94%). They noted that the tools provide an extra layer of due diligence and boost lenders’ confidence in appraisals.
  • “Shortening loan origination cycle time” was overwhelmingly cited as the most important potential benefit of appraisal modernization, followed by “enhancing appraiser capacity” and “lowering consumer/borrower costs.” The benefits associated with appraisal quality and risk management were also considered important by many lenders, including enhancing data quality, increasing confidence, reducing errors, and lowering repurchase risk.
  • Lenders cited “the speed of industry-wide adoption” as the biggest implementation challenge, followed by “integration with loan origination systems” and “integration with GSE automated underwriting systems.” 
  • “Inspection-based appraisal waivers” and “nontraditional appraisals (e.g., desktop appraisals or hybrid appraisals)” were cited as the areas most likely to benefit from adoption. Additionally, one-third of lenders think it would be helpful to “incorporate tools such as image recognition or GIS (geographic information systems) into the scoring logic of underwriting or quality-control tools.”

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Email story ideas to Editor Kimberley Haas: [email protected]